| Basis of presentation and significant accounting policies | Note 3
— Basis of presentation and significant accounting policies Basis
of presentation The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”)
and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of management,
all adjustments, consisting only of normal recurring adjustments, considered necessary for a fair presentation of its financial position
and operation results. Interim results are not necessary indicative of results of a full year. The information in this Quarterly Report
on Form 10-Q (the “10-Q”) should be read in conjunction with information in the Annual Report for the fiscal year ended June
30, 2024 on Form 10-K filed by the Company with the SEC on October 24, 2024. Principles
of consolidation The unaudited condensed consolidated
financial statements include the financial statements of the Company and its subsidiaries. All transactions and balances among the Company
and its subsidiaries have been eliminated upon consolidation. A
subsidiary is an entity in which the Company, directly or indirectly, controls more than one half of the voting power; or has the power
to govern the financial and operating policies, to appoint or remove the majority of the members of the board of directors, or to cast
a majority of votes at the meeting of directors. Use
of estimates and assumptions The
preparation of unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of
the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the periods
presented. Actual results could differ from these estimates. Restricted
cash Restricted cash is maintained
in a trust account and is restricted to repay the redeeming shareholders of ACAC upon the Closing
(see Note 4) Accounts
receivable Accounts
receivables are recognized and carried at the original invoiced amount less an allowance for any uncollectible accounts on credit losses.
Allowance for credit losses for accounts receivables is established based on various factors including historical payments and current
economic trends. The Company reviews its allowance for credit loss by assessing individual accounts receivable over a specific aging
and amount. All other balances are pooled based on historical collection experience. The estimate of expected credit losses is based
on information about past events, current economic conditions, and forecasts of future economic conditions that affect collectability.
Accounts receivable are written-off on a case by case basis after exhaustive efforts at collection are made, net of any amounts that
may be collected. As of September 30, 2024 and June 30, 2024, no allowance for credit losses of accounts receivable was recorded
and the Company had accounts receivable of $12,371,365 and $251,894, respectively. Inventories Inventories
are stated at the lower of cost or net realizable value, the estimated selling prices in the ordinary course of business, less reasonably
predictable costs of completion, disposal and transportation. Cost is determined using the “First in, First out” method.
Inventories mainly include electronic products and accessories which are purchased from the Company’s suppliers as merchandized
goods and freight-in. On an annual basis, inventories are reviewed for potential write-downs for estimated obsolescence or unmarketable
inventories which equals the difference between the costs of inventories and the estimated net realizable value, the estimated selling
prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation, based upon forecasts
for future demand and market conditions. When inventories are written down to net realizable value, it is not marked up subsequently
based on changes in underlying facts and circumstances. As of September 30, 2024 and June 30, 2024, the Company had inventories
of $4,540,549 and $1,768,072, respectively. During the three months ended September 30, 2024 and 2023, no inventory write-down was
recorded. Contract
assets Contract assets consisted
of cash deposited or advanced to suppliers for future inventory purchases. This amount is refundable and bears no interest. For any advances
to suppliers determined by management that such advances will not be in receipts of inventories or refundable, the Company will recognize
an allowance account to reserve such balances. Management reviews its advances to suppliers on a regular basis to determine if the allowance
is adequate and adjusts the allowance when necessary. Delinquent account balances are written-off against allowance for credit losses
after management has determined that the likelihood of collection is not probable. The Company’s management continues to evaluate
the reasonableness of the valuation allowance policy and update it if necessary. As of September 30, 2024 and June 30, 2024, no allowance
for credit losses on contract assets was recorded. Deferred
transaction costs The Company complies with
the requirements of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 340-10-S99-1,
“ Other Assets and Deferred Costs — SEC Materials Expenses of Offering Payables
on shares redemption Payables on shares redemption
consisted of payables to the ACAC shareholders who exercised their redemption rights in connection with the Business Combination (See
Note 4). Contract
liabilities Contract
liabilities mainly consisted of deposits received from customers before all the relevant criteria for revenue recognition are met and
are recorded as customer deposits. Earnout
liabilities At the Closing of the Business
Combination, pursuant to the Business Combination Convertible
instrument The Company accounts for its convertible instrument in accordance with
ASC 470-20 Debt with Conversion and Other Options, whereby the convertible instrument is initially accounted for as a single
unit of account, unless it contains a derivative that must be bifurcated from the host contract in accordance with ASC 815-15 Derivatives
and Hedging — Embedded Derivatives — Debt
with Conversion and Other Options Revenue
recognition The
Company recognizes revenue to depict the transfer of promised goods or services (that is, an asset) to customers in an amount that reflects
the consideration to which the Company expects to receive in exchange for those goods or services. An asset is transferred when the customer
obtains control of that asset. It also requires the Company to identify contractual performance obligations and determine whether revenue
should be recognized at a point in time or over time, based on when control of goods and services transfers to a customer. To
achieve that core principle, the Company applies the five steps defined under Topic 606: (i) identify the contract(s) with
a customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, (iv) allocate
the transaction price to the performance obligations in the contract, and (v) recognize revenue when (or as) the entity satisfies
a performance obligation. The
Company’s main business is selling electronic products to 1) wholesale customers and 2) individual E-commerce customers. Wholesale
Customers The
Company recognizes a contract with a customer when the contract is committed in writing, the rights of parties, including payment terms,
are identified, the contract has commercial substance, and collectability is probable. A performance obligation is a promise in a contract to transfer a distinct
good or service to the customer and is the unit of accounting in FASB Accounting Standards Update No. 2014-09, Revenue from Contracts
with Customers Gross
versus Net Revenue Reporting The
determination of whether revenues should be reported on a gross or net basis is based on the Company’s assessment of whether it
is the principal or an agent in the transaction in accordance with ASC 606-10-55 and depends on whether the promise to the
customer is to provide the products or to facilitate a sale by a third party. The nature of the promise depends on whether the Company
controls the products prior to transferring them. When the Company controls the products, the promise is to provide and deliver the products
and revenue is presented gross. When the Company does not control the products, the promise is to facilitate the sale and revenue is
presented net. To
distinguish a promise to provide products from a promise to facilitate the sale from a third party, the Company considers the guidance
of control in ASC 606-10-55-37A and the indicators in ASC 606-10-55-39. The Company considers this guidance in conjunction
with the terms in its arrangements with both suppliers and customers. The
Company orders the products and pays in advance from its supplier. When the supplier has completed production, the Company inspects and
accepts the products in its suppliers’ warehouse or at the designated logistic warehouse of the supplier. This enables the Company
to direct the use of these products but to also bear inventory risk as legal owners. The Company has the responsibility of fulfilling
the promise to provide the products to its customers, and also includes an additional 2-3% of products on top of each customer’s
order , which covers any damage incurred in shipping and no refund and no return will be granted to customers; or provided a one-year warranty
period with no additional 2-3% of products on top of each customer’s order, depending on the specified contract. In addition, when
establishing the selling prices for delivery of the products, the Company has control to set its selling price. All these factors indicate
that the Company is acting as the principal in this transaction. As a result, revenue from the wholesale customer is presented on a gross
basis. Warranty The
Company generally provides 1-year warranties for its product sold to its wholesale customer if an additional 2-3% of products on top
of each customer’s order was not provided. For the sale transactions that were provided with 2-3% of products on top of each customer’s
order, these additional 2-3% products were recognized as cost of goods sold at the same time the respective sale is recognized. For the
sales transactions that the Company provided limited warranties to both wholesale customers and e-commerce customers, the Company records
estimated future warranty costs under ASC 460. Such estimated costs for warranties are estimated at the time of delivery, and these
warranties are not service warranties separately sold by the Company. Generally, the estimated claim rates of warranties are based on
actual warranty experience or the Company’s best estimate. As of September 30, 2024 and June 30, 2024, the Company accrued warranty
reserves of $133,279 and $48,361, respectively recorded under accrued liabilities and other current liabilities, and these reserves were
recognized based on estimation and judgment from the Company’s management. E-Commerce
Customers The Company recognizes a contract with a customer when the contract
is committed in writing and signed electronically on an E-Commerce platform, the rights of parties, including payment terms, are identified,
the contract has commercial substance, and collectability is probable. A
performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of accounting
in Topic 606. A contract’s transaction price is allocated to each performance obligation identified in the arrangement based
on the relative standalone selling price of each distinct good or service in the contract and recognized as revenue when, or as, the
performance obligation is satisfied. For all the Company’s contracts, the Company has identified one performance obligation, which
is primarily satisfied at a point in time upon delivery of products based on terms stated in the contracts on shipping destination at
its individual customer shipping address, which is the Company’s obligation to deliver the product to the end user/individual customer,
depends on the specified contract. The Company’s E-Commerce customers pay the order in full balance prior to shipment to the E-Commerce
Platform and the E-Commerce Platform withheld the payment for 30 days before remitting payments to the Company. The Company offered one
month of free exchange or return. As a result, the Company recognized its revenues from the E-Commerce customers, in the third-party
E-commerce platform, net of estimated sales returns, discount, and rebate, as a consideration reducing the transaction price. Historically,
sales returns were insignificant to the Company’s operations. For the three months ended September 30, 2024 and 2023, the Company
recognized estimated sales returns of $1,557 and $0, respectively, and such reserves are based on estimation and required judgment from
the Company’s management. There are no transaction prices allocated to future periods or future obligations and no revenue was
recognized for performance obligations satisfied in previous periods. Gross
versus Net Revenue Reporting The
determination of whether revenues should be reported on a gross or net basis is based on the Company’s assessment of whether it
is the principal or an agent in the transaction in accordance with ASC 606-10-55 and depends on whether the promise to the customer
is to provide the products or to facilitate a sale by a third party. The nature of the promise depends on whether the Company controls
the products prior to transferring them. When the Company controls the products, the promise is to provide and deliver the products and
revenue is presented gross. When the Company does not control the products, the promise is to facilitate the sale and revenue is presented
net. To
distinguish a promise to provide products from a promise to facilitate the sale from a third party, the Company considers the guidance
of control in ASC 606-10-55-37A and the indicators in ASC 606-10-55-39. The Company considers this guidance in conjunction
with the terms in its arrangements with both suppliers and customers. The
Company orders the products, and the suppliers ship the products to the Company’s warehouse where the Company inspects and accepts
the products. This enables the Company to direct the use of these products but to also bear inventory risk as legal owners. The Company
has the responsibility of fulfilling the promise to provide the products to its customers, and to provide a one-year warranty period
for each customer’s order. In addition, when establishing the selling prices for delivery of the products, the Company has control
to set its selling price at the E-commerce platform. All these factors indicate that the Company is acting as the principal in this transaction.
As a result, revenue from the E-Commerce customer is presented on a gross basis. Practical
expedient The
Company applies the practical expedient in ASC 606 to expense costs as incurred for costs to obtain
a contract with a customer when the amortization period is one year or less. The Company has no material incremental costs of obtaining
contracts with customers that the Company expects the benefit of those costs to be longer than one year which need to be recognized as
assets for the three months ended September 30, 2024 and 2023. Lease The
Company accounts for leases in accordance with ASC 842. The Company categorizes leases with contractual terms longer than 12 months
as either operating or finance. Finance leases are generally those leases that substantially utilize or pay for the entire asset over
its estimated life. All other leases are categorized as operating leases. Costs associated with operating lease assets are recognized
on a straight-line basis within operating expenses over the term of the lease. As of September 30, 2024 and June 30, 2024, the Company
does not have finance leases. The
Company determines if an arrangement is, or contains, a lease at inception. Operating lease assets represent the Company’s right
to control the use of an identified asset for a period of time, or term, in exchange for consideration, and operating lease liabilities
represent its obligation to make lease payments arising from the aforementioned right. Operating
lease right-of-use (“ROU”) assets and liabilities are initially recorded based on the present value of lease payments over
the lease term, which includes the minimum unconditional term of the lease, and may include options to extend or terminate the lease
when it is reasonably certain at the commencement date that such options will be exercised. As the rate implicit for each of the Company’s
leases is not readily determinable, the Company uses incremental borrowing rate as effective interest rate, based on the information
available at the lease commencement date in determining the present value of its expected lease payments. Operating lease assets also
include any initial direct costs and any lease payments made prior to the lease commencement date and are reduced by any lease incentives
received. According to ASC 842-10-15-37, a lessee may, as an accounting policy election by class of underlying asset, choose not
to separate non-lease components from lease components and instead to account for each separate lease component and the non-lease components
associated with that lease component as a single lease component. The Company has identified the common area maintenance (CAM) fee as
a non-lease component and elected to not separate it from the lease component. Operating
lease assets are amortized on a straight-line basis in operating lease expense over the lease term on the consolidated statements of
operations. The related amortization of ROU assets along with the change in the operating lease liabilities are separately presented
within the cash flows from operating activities on the consolidated statements of cash flows. The Company records lease expenses for
operating leases on a straight-line basis over the lease term. The
Company reviews the impairment of its right-of-use assets consistent with the approach applied for its other long-lived assets on an
annual basis. The Company reviews the recoverability of its long-lived assets when events or changes in circumstances occur that indicate
that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on its ability to recover
the carrying value of the asset from the expected undiscounted future pre-tax cash flows of the related operations. The Company has elected
to include the carrying amount of operating lease right-of-use assets in any tested asset group and include the associated lease payments
in the undiscounted future pre-tax cash flows. For the three months ended September 30, 2024 and 2023, the Company did not recognize
impairment loss against its right-of-use assets. For
a lease with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset
not to recognize lease assets and lease liability. For the lease that with lease term of one year or shorter, the Company has elected
to not recognize right-of-use asset and lease liability. Warrants The Company accounts for warrants as either equity-classified or liability-classified
instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480, Distinguishing
Liabilities from Equity Derivatives and Hedging For
issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component
of equity at the time of issuance. The Company determined that upon further review of the warrant agreements, the Company concluded that
its warrants qualify for equity accounting treatment. Upon completion of the Business Combination, all of ACAC’s outstanding
public and private warrants (See Note 16) were replaced by the Company’s public and private warrants. The Company treated
such warrants replacement as a warrant modification and no incremental fair value was recognized for the three months ended September
30, 2024. Recently
adopted accounting standards The
Company considers the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews
new accounting standards that are issued. Under the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS
Act”), the Company meets the definition of an emerging growth company and has elected the extended transition period for complying
with new or revised accounting standards, which delays the adoption of these accounting standards until they would apply to private companies. In
March 2022, the FASB issued ASU 2022-02, Financial Instruments — Credit Losses (Topic 326) Except
as mentioned above, the Company does not believe other recently issued but not yet effective accounting standards, if currently adopted,
would have a material effect on the Company’s balance sheets, statements of operations and statements of cash flows. Recently
issued accounting pronouncements not yet adopted In November 2023, the FASB issued ASU No. 2023-07, “ Segment
Reporting In December 2023, the FASB issued ASU No. 2023-09, “ Income
Taxes (Topic 740): Improvements to Income Tax Disclosures |
